The Indian government is looking into the viability of forming a consortium of state-run coal mining, railway, infrastructure and engineering consultancy companies to undertake turnkey projects in Mongolia and build necessary logistics and infrastructure to import coking coal for Indian steel companies, government sources said on Friday, April 26.
According to the sources, the move is a follow-up action after Mongolia approached India’s ministry of steel last year seeking to explore a suitable tie-up for shipping coking coal from Mongolia to India.
The option of creating a consortium of Indian government-run companies operating in coal mining, railways and infrastructure was mooted by the joint India-Mongolia joint working group set up last year soon after the approach made by Mongolian government officials, the sources said.
It was pointed out that, Mongolia being landlocked, there are infrastructure challenges in terms of shipping coking coal from the country to India and exports of coking coal from the country are dependent on routes, infrastructure and logistical support from Russia and China.
India and Russia are working to operationalize the Vladivostok-Chennai shipping route, which covers a distance of 10,500 km, but suitable logistical and infrastructure linkages would have to be constructed if this route was to be used to ship coking coal out of Mongolia, the sources said.
India’s domestic steel mills are currently dependent on imported coking coal to the extent of 80-90 percent from Australia, the US and over the past year from Russia, shipping in an estimated 53 million mt in 2022-23.